Report: Microsoft creating cashierless tech to battle Amazon Go

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Dive Brief:

Microsoft is reportedly developing technology that would enable cashierless point of sales systems to help retailers keep up with the growing competitive threat of Amazon Go, according to an exclusive Reuters report attributed to unnamed sources. In response to Retail Dive's request for comment, Microsoft said it does not comment on rumors or speculation.

The Reuters story states that the software giant has shown "sample technology" capable of tracking items added to shopping carts to several retailers, and three unnamed sources told the news agency that Microsoft has spoken Walmart about "a potential collaboration." A Walmart spokesperson declined to comment to Retail Dive.

Microsoft is working on ways to minimize the potential expense of the technology, and could be working to create a device that would manage networked cameras and other equipment in-store, according to the report.

Dive Insight:

Neither Microsoft nor Walmart commented for the Reuters report, but it would not be surprising to see Microsoft make a major play in the emerging cashierless checkout sometime soon. In fact, it already has been working on some of the necessary technologies to enable cashierless checkout, such as computer vision, for many years. This report could be the big hint that Microsoft is closer than ever to assembling various technologies and components into a broader cashierless checkout system.

It also would make a lot of sense if Walmart were to become one of the first major retailers to test such a system. The retailer dabbled in cashierless checkout with its Scan & Go program earlier this year, but abruptly ended the service only a few months after expanding it to more than 100 stores. Though Walmart reportedly is looking at mobile POS technology for store associates, it’s hard to believe Walmart has completely rejected the notion of cashierless checkout — it’s more likely waiting for better technology to emerge.

It’s still early days for cashierless checkout. Even so, Amazon isn’t the only retailer charging into the space. Companies as varied as Kroger, Meijer and China’s JD.com are adopting their own versions of cashierless technology. Still, Amazon reportedly is getting closer to launching more Amazon Go stores, and the specter of market disruption that comes with the e-commerce giant's entry into any new segment is hard to match.

Likewise, Microsoft isn’t the only technology company working to give the rest of retail the means to compete with Amazon Go. For example, start-up AiFi was greeted with much fanfare earlier this year when it announced its own cashierless technology, and it can be assumed that any company with an embedded investment in existing checkout or mobile POS technology — Oracle and IBM, among others — must be experimenting with completely cashierless systems at this point. Still, like Amazon, Microsoft poses a massive competitive threat to any other technology company working to capture this emerging market.

Editor's note: This story has been updated to include a response from Microsoft.